\u3000\u3 Shengda Resources Co.Ltd(000603) 359 Dongzhu Ecological Environment Protection Co.Ltd(603359) )
Events
On March 15, 2022, Dongzhu Ecological Environment Protection Co.Ltd(603359) released the performance forecast for 2021. It is estimated that the revenue in 2021 will be about 2.75 billion yuan, about + 17.62% year-on-year; It is estimated that the net profit attributable to the parent company will reach RMB 456 million to RMB 475 million in 2021, with a year-on-year increase of + 20% to + 25%, which is expected to meet the standard of the first unlocking period of the first phase of the employee stock ownership plan. In a single quarter, Q4 is expected to achieve a revenue of 960 million yuan in 2021, a month on month increase of + 86.77% and a year-on-year increase of + 64.38%; The net profit attributable to the parent company was 96 to 115 million yuan, a month on month increase of + 15.66% to + 38.55%, and a year-on-year increase of + 200.00% to + 259.38%.
Comments
In 2021, the company achieved steady growth in revenue and performance, mainly due to the increase in the demand for ecological and environmental protection under the double carbon background, the acceleration of the revitalization of new rural areas and emerging infrastructure markets, and the company’s two traditional business lines of ecological restoration and municipal landscape.
The main businesses of ecological restoration and municipal landscape are booming. The bid winning and contract signing amount in the whole year are + 48.66% / + 24.87% year-on-year respectively. In 2021, the company and its subsidiaries won 16 new bid projects (13 landscaping and ecological engineering construction businesses + 3 planning and design businesses), with a total bid winning amount of 2.884 billion yuan, a year-on-year increase of + 48.66%. In 2021, the company and its subsidiaries signed 16 new project contracts (14 landscaping and ecological engineering construction businesses + 2 planning and design businesses), with a total project amount of 2.355 billion yuan, a year-on-year increase of + 24.87%. In a single quarter, Q4 company and its subsidiaries won 5 new bid projects in 2021, with a total bid winning amount of 1.395 billion yuan, a year-on-year increase of + 151.71%; Six new project contracts were signed, with a total project amount of RMB 952 million, a year-on-year increase of + 13.15%.
With the rapid expansion of forestry resources, carbon sequestration business will benefit from the progress of implementation and the restart of CCER. Relying on the advantages of market, team, capital and cooperation, the company has rapidly and deeply arranged the forest carbon business. In October last year, the company became the only forestry enterprise selected among the 100 constituent stocks of the carbon neutralization index of Shanghai central stock exchange. From the perspective of the development process of the company’s forestry resources, the company’s forestry resources have expanded rapidly. In November last year, the company signed a cooperation agreement on carbon sequestration development of far more than 5 million mu of forest resources with Sichuan Changjiang Afforestation Bureau; Signed a strategic cooperation framework agreement with the people’s Government of Ninghua County in December last year (forest land area of about 2.79 million mu); In January this year, it signed a strategic cooperation agreement with the people’s Government of Yongde County (about 3.3 million mu of forest land) and a project investment framework agreement with the people’s Government of Yongping County (about 3.03 million mu of forest land); In February this year, it signed the project investment framework agreement with Luzhou Aviation Development Group Co., Ltd. (the forest land area is about 9.2 million mu). The company’s forest carbon business is expected to be launched one after another. From the perspective of policy, both Shanghai Environmental Exchange and Beijing Environmental Exchange have publicly announced that CCER is expected to restart this year, and the company’s carbon sequestration business will benefit from the restart of CCER.
Investment advice
Considering the steady growth of the company’s traditional business and the accelerated layout of its forest carbon business, we forecast the company’s EPS for 2021 / 22 / 23 to be 1.05/1.31/1.95 yuan respectively, and the corresponding PE to be 10 / 8 / 5x respectively, maintaining the “strongly recommended” rating.
Risk tips
Order performance is lower than expected; The implementation of the policy is less than expected; The promotion of carbon trading is less than expected.
